President Obama Releases Climate Action Plan

Beveridge & Diamond, P.C., July 24, 2013

On June 25, 2013, President Obama announced his Climate Action Plan which sets forth a sweeping strategy to curb domestic carbon emissions, bolster the resiliency of communities and infrastructure, and lead international efforts to combat global climate change. While a large portion of the plan summarizes activity already underway, the President also introduced new goals and initiatives for executive action over the next several years. The plan consists of three key components that are summarized below.

Cut Carbon in America

The first component of the President’s plan is aimed at mitigating the impacts of climate change by curbing carbon emissions in the United States. Most notably, the President directs the Environmental Protection Agency to “expeditiously” develop carbon pollution standards for new and existing power plants. The plan instructs EPA to directly engage States, minimize costs, and utilize regulatory flexibilities in developing these standards. The Agency submitted a proposed rule for new power plants to the White House Office of Management and Budget on July 1. The plan specifies that the final rule should be issued by September 20, 2013. It is expected that EPA will promulgate separate standards for coal and natural gas plants.

One of the major goals of the President’s plan is a doubling of renewable electricity generation in the United States by 2020. To achieve this objective, the Department of Interior will issue permits for an additional 10 gigawatts of renewables on public lands by 2020. The Department of Defense will deploy 3 gigawatts of renewable energy on military installations by 2025. In further pursuit of carbon reductions, the Energy Department will make available up to $8 billion in loan guarantee authority to advanced energy projects, such as carbon sequestration and modular nuclear reactors. These mitigation efforts will be coupled with an energy efficiency target that doubles energy productivity by 2030 relative to 2010 levels.

The President’s strategy for climate action also encompasses the transportation sector. Building on the fuel economy standards finalized in 2011, the Administration will develop post-2018 standards for heavy-duty vehicles to further limit the consumption of fossil fuel. The Administration will also continue to promote alternative fuels such as biomass-based fuels, advanced batteries, and fuel cell technologies. The plan highlights the President’s support for Renewable Fuel Standards and his continued effort to promote next-generation biofuels through investments in research and development.

Extending its focus beyond carbon, the President’s Climate Action Plan acknowledges the need to address other greenhouse gas emissions. To this end, the EPA and the Departments of Agriculture, Energy, Interior, Labor, and Transportation will develop an interagency methane strategy that includes an assessment of best reduction technologies and practices. The plan also stresses the importance of an economy-wide effort to lower methane emissions, focusing on oil and gas development. In particular, the plan emphasizes the varied benefits of investment in natural gas pipeline infrastructure.

Prepare the United States for the Impacts of Climate Change

The President’s agenda includes three interrelated initiatives aimed at preparing the United States for the impacts of climate change. First, the plan outlines steps for building the resiliency of communities and infrastructure through the support of climate-resilient investment, the creation of task forces, the provision of agency assistance to communities, and the development of safer infrastructure. Next, the plan provides for the protection of the United States economy and its natural resources through sector- and hazard-specific efforts such as exploring best practices for private and public insurers and improving natural defenses against extreme weather. Lastly, the plan emphasizes the need to further develop our understanding of climate change impacts through data collection and scientific research.

Lead International Efforts to Address Global Climate Change

The international segment of the President’s plan recognizes a need for the United States to spearhead global action on climate change. One of the cornerstones of this endeavor is leadership at the 2015 United Nations Framework Convention on Climate Change, where the President will seek an “ambitious, inclusive, and flexible” agreement amongst participating nations. Another critical component of this effort is the President’s decision to terminate support for public financing of new coal plants overseas, with certain limited exceptions. The President will also lead the international community by example in his decision to eliminate U.S. fossil fuels tax subsidies in the Fiscal Year 2014 budget.

Another facet of the President’s international approach to climate change is encouraging a switch from coal to natural gas. The Administration is partnering with states and private companies to share best practices with other countries seeking to develop their natural gas resources. The Administration will support the expansion of a global market for gas and promote the development of heavy-duty natural gas vehicles, which are expected to account for 40 percent of increased oil use through 2030. The President’s plan simultaneously includes steps for increasing nuclear energy generation, advancing the use of clean coal technologies, and promoting energy efficiency overseas.

The Keystone XL Pipeline

Though not included in the Climate Action Plan, the construction of the Keystone XL pipeline was mentioned briefly in the President’s speech introducing the plan. The President stated that the pipeline would only be built if it was determined that the project does not significantly increase carbon emissions. Environmentalists were encouraged by the President’s use of carbon pollution as the standard for his decision on Keystone XL pipeline. However, the State Department concluded in March that building the pipeline would not significantly increase greenhouse gas emissions. The Sierra Club has filed a lawsuit in federal court challenging this conclusion.

If you would like to discuss the President’s Climate Action Plan and how it may impact your operations and business, please contact David M. Friedland at dfriedland@bdlaw.com or (202) 789-6047 or Linda Tsang at ltsang@bdlaw.com or (202) 789-6073.